How Regulatory Pressure is Reshaping Customer Journeys in 2025

You may have noticed that new regulations and increasing oversight have been cropping up everywhere in recent years, and 2025 is no different. Across financial services, utilities, essential services and government, regulators are scrutinising how organisations treat customers throughout their journeys. The FCA has tightened its focus on resilience, governance and data protection, while Ofwat has introduced stretching new standards for water companies, and Ofgem has advanced its debt and vulnerability strategy. Even local government has been swept in, with reviews underway on council tax support.

What regulators want is no longer just evidence that policies exist, but proof that customers are experiencing fair treatment and good outcomes in practice. That means closer engagement at risky stages such as collections, better protection of vulnerable customers, and higher expectations around how data is handled and shared. Ofwat's new Priority Services Register requirements, launched in April 2025, demand that water providers increase enrolment of vulnerable households while improving how support is tracked and shared.

Analysts see the same shift. Forrester has noted that consumer-facing industries are moving from "process compliance" towards "experience compliance", where oversight is linked to lived customer journeys. In the UK, the Consumer Duty has become the clearest example of this, but it is now joined by parallel initiatives across utilities and essential services. Compliance is no longer a tick-box exercise; it is becoming a holistic customer standard.

Looking ahead, we cannot see any let up from regulators, with a busy pipeline already in motion. The FCA is pushing forward with reviews of product sales data, new QA frameworks and credit reform, while Ofgem develops its debt and vulnerability strategy and Ofwat introduces new requirements for service providers. By July 2026, Buy Now Pay Later will fall under FCA supervision, and new redress schemes and operational resilience reporting frameworks are being prepared.

Government initiatives are adding to the pressure. A new water regulator and watchdog is being set up, and the "Tell Me Once" programme is expanding to ensure customers only need to disclose circumstances such as bereavement a single time across essential services. The UK Regulators' Network (UKRN) has also published its delivery plan for 2025-2026, highlighting collaboration, inclusivity and innovation as priorities. Together, these moves show a regulatory environment that is tightening across every sector, not just financial services.

Regulators are making it clear that innovation should deliver benefits for customers, not just firms. The FCA's 2025-26 programme includes measures to make it easier to test innovative products, and government growth objectives are encouraging adoption of scalable, secure technology. Similar language has appeared in Ofwat and Ofgem's strategies, which stress that digital solutions must help customers access fairer, more resilient services.

With almost half of UK adults showing one or more characteristics of vulnerability in 2024, regulators expect firms to prove how technology supports inclusion. Digital journeys and AI-driven tools must be tested to ensure they do not exclude customers or create new risks. FourNet has worked with organisations across sectors on this challenge, from co-designing dementia-friendly contact centres with Alzheimer's Society, through to building secure, outcome-focused platforms for essential service providers.

A recurring theme in 2025 has been the idea of 'positive friction', which introduces deliberate pauses in digital journeys to encourage reflection and avoid poor outcomes. The FCA has applied this to consumer credit and BNPL, but the principle is relevant far beyond finance. Ofgem has raised similar concerns about how customers are presented with debt repayment options, while water providers are being told to make their services more transparent for those in difficulty.

This is about designing services that help customers stop, process information and make informed decisions, rather than being rushed through complex choices. Poorly designed apps or websites risk nudging customers into harmful outcomes. Regulators are now scrutinising design alongside compliance, and good design is being recognised as part of customer protection.

Across industries, regulators are making vulnerability a central theme. The FCA has continued to publish findings on how firms identify and treat vulnerable customers, while Ofwat's new PSR standards focus on disability, age and communication needs. Ofgem's vulnerability strategy emphasises debt management and protections for customers facing hardship.

Despite progress, the reviews show persistent gaps. Too few organisations identify multiple vulnerabilities, data collection is inconsistent, and training for staff is patchy. Feedback from customers in vulnerable circumstances is often missing altogether. Best practice is now shifting towards early identification, tailored treatment paths and collaboration with charities and advocacy groups. Co-design, once a differentiator, is now expected.

Strong governance is a regulatory expectation across all sectors, yet findings consistently show weaknesses. Fewer than half of firms in the FCA's review had governance committees actively overseeing outcomes for vulnerable customers. Ofwat has highlighted similar issues in water providers, pointing to under-investment in back-office systems that support customer resilience.

What regulators want to see is vulnerability being embedded across frameworks, from product assurance and QA to risk management and training. Leadership engagement is critical. Regulators are calling out firms that can produce policies but cannot demonstrate they are being put into practice.

Better use of data is becoming a common demand across regulators. The FCA has highlighted narrow use of complaints and QA data, while Ofwat and Ofgem are both requiring more robust tracking of vulnerable customers and the outcomes they experience. From 2026, 'big data' will become a regulatory theme as the FCA begins collecting agreement-level performance outcomes each quarter, increasing the pressure on firms to improve their analytics.

Firms are being told to broaden the scope of data they collect, test communications for clarity, and make better use of customer feedback. Without richer insights, organisations will struggle to prove that they are delivering the outcomes regulators expect.

Regulators agree on the groups most at risk of poor outcomes: elderly customers, those with disabilities, people with mental health challenges, individuals facing financial hardship, and those dealing with situational crises such as bereavement or job loss. Many face multiple vulnerabilities at once, which compounds risks and increases the need for tailored support.

The FCA has described a "spectrum of risk," but this concept applies more widely. Vulnerability is not static. Customers can move from mild to severe needs over time, and services must adapt quickly to those changes.

It is easy to assume vulnerability is only financial, but regulators are clear that it extends beyond money. Ofwat's PSR standards emphasise disability and communication needs, while Ofgem points to situational hardship, and the FCA highlights literacy, language and social isolation.

Customer Interaction Models are expected to account for all of these, with empathetic, accessible and consistent communication. Regulators are pushing firms to recognise that personal circumstances can affect decision-making and engagement just as much as financial position.

The numbers highlight the scale of the challenge. Almost half of firms have gaps in identifying vulnerable customers, more than half lack sufficient training for staff, and a third of vulnerable customers report not receiving appropriate support. One in five say they have been treated unfairly or misunderstood by their provider.

Customers often choose not to disclose their circumstances, citing embarrassment, fear of worse treatment, or a belief that the firm will not help. This shows how important it is for organisations to build trust and provide safe, supportive ways for customers to share their situations.

At FourNet we help organisations turn regulatory expectations into practical, customer-focused change. Our work spans financial services, utilities, essential services and the public sector, giving us a clear view of how regulators are raising the bar across industries.

We support clients by:

• Delivering digital transformation through rapid diagnostics and cloud migration
  
• Enhancing customer experience with self-service and omnichannel design
  
• Supporting resilience with secure platforms, governance and project expertise
  
• Using analytics to provide evidence of customer outcomes and ROI
  
• Embedding ESG, net zero and social value into every solution

Our partnerships, from dementia-friendly solutions with Alzheimer's Society to secure infrastructure for utilities, show how compliance and innovation can work hand in hand. By aligning regulatory demands with customer-focused design, we help organisations build services that are resilient, inclusive and trusted.